THE INTERRELATIONSHIP BETWEEN WATER RIGHTS, ADJUDICATIONS AND FEDERAL REGULATORY PROGRAMS
presented by
Michael J. Van Zandt, Esq.

I. The Rights of the Settlers to Enter Upon and Appropriate Water Rights on the Public Land Were Confirmed by the U.S. Congress and Preserved by Later Acts.

The United States Congress has passed various acts that deal with public land entry, settlement, homestead, and stockraising. Analyzing these various acts of Congress cannot be accomplished by focusing on each one as if it was an isolated and independent action by the Congress. It is axiomatic that, while it is engaged in the process of creating legislation, Congress is cognizant of existing law when it passes legislation. See, e.g., Cannon v. University of Chicago, 441 U.S. 677, 696-97, 99 S.Ct. 1946, 60 L.Ed. 2d 560 (1979).

It is extremely important that the one view the impacts and benefits of the various Congressional acts from the perspective of the settlers as they set about the task of taming the arid West. From the very first act of Congress addressing entry and settlement on the public land, its expressed intention was to dispose of the land so that the natural treasure that belonged to the United States could be put to productive use by its citizens. Land Ordinance of May 20, 1785, 28 J. Continental Congress 375. The return benefit to the United States was productivity and economic contribution to the newly emerging communities in which these federal lands were sited. Id.

The Land Ordinance of 1785 adopted the system of rectangular survey used throughout most of the country for the surveying of townships. Id. The public domain lands were to be surveyed prior to their disposition. In a series of laws beginning in 1841, Congress established and encouraged the development and disposition of lands under the control of the federal government. The first United States law governing the western lands ceded to the United States by Mexico was called "Kearney's Code." This code was established by Brigadier General Stephen Watts Kearney on September 27, 1845, nearly a year and a half prior to the signing of the Treaty of Guadalupe-Hidalgo on Feb. 7, 1848 (9 Stat. 922). The code continued in effect all laws of the former Mexican States pertaining to estates, property rights, settlement, and possession of land "which [were] not repugnant to or inconsistent with the constitution of the United States," until such time as these laws might be changed by future legislation. See, e.g., United States v. Santa Fe, 165 U.S. 675; 17 S.Ct. 472; 41 L.Ed. 874 (1897) (discussing laws of New Mexico and "Kearney's Code.") The Code also stated, "The laws heretofore in force concerning water courses, stock marks and brands, horses, enclosures, commons and arbitrations shall continue in force. . . ." Id.

In one of its earliest decisions, the California Supreme Court found that the property law of prior possession or occupancy existed under Mexican law, as well as under common law, and that occupation of land for stockraising could create a possessory property right. Sunol v. Hepburn, 1 Cal. 254, 262-263 (1850). Claims to large tracts of land could be perfected by demonstrating that the cattle were restricted by "keepers or otherwise within definite boundaries" of the lands claimed to be in possession. Id. at 262. In the "Yosemite Valley case," Hutchings v. Low, 15 Wall. 77 (1873), the U.S. Supreme Court determined that a party in possession under the preemption laws could be ousted from possession if the United States granted to the state of California a portion of the Yosemite Valley in which the party in possession resided. Subsequently, through a series of laws, Congress determined that entry into the public domain under the mining laws could not divest a person of possession of his claim when the United States attempted to grant that same land to the states. United States v. Sweet, 245 U.S. 563, 572-573, 38 S.Ct. 193, 62 L.Ed. 473 (1918).

The possession claims were further reinforced by section 9 of the Act of July 26, 1866 (43 U.S.C. § 661), in which Congress confirmed the system of split-estate possessory rights for miners, farmers, and ranchers on the federal lands. In Broder v. Water Co., 101 U.S. 274, 25 L.Ed. 790 (1879), the Supreme Court determined that the rights of possession in the West were rights the Congress had recognized and were rights the government was bound to protect. Id.; see also Jennison v. Kirk, 98 U.S. 453, 460, 25 L.Ed. 240 (1878). The import of this confirming step by the U.S. Congress is unfolded in the U.S. Supreme Court decisions of Bryan v. Forsyth, 19 How. 334 (1857) and Tameling v. U.S. Freehold & Emigration Co., 93 U.S. 644, 23 L.Ed. 998 (1876), wherein the Supreme Court stated that where Congress passed a "confirmatory act," that the Congressional act passed vested title as effectually as if a patent had been issued, and that the only power remaining in the government was the authority to settle boundary disputes by an official government survey. Id. at 663.

The Mining Laws of 1866 and 1872 devised a system of split-estate lands whereby such lands were effectively withdrawn from the public domain once the settlers entered upon and began improving them. 14 Stat. 251, 253, § 11Act of July 9, 1870, 16 Stat. 218 California Oregon Power Co. v. Beaver Portland Cement Co.,

295 U.S. 142, 155, 55 S.Ct. 725, 79 L.Ed. 1356 (1935)Desert Lands Act of 1877. 19 Stat. 377Act of October 2, 1888, 25 Stat. 527 California v. United States, 438 U.S. 645, 659,

98 S.Ct. 2985, 59 L.Ed.2d 1018 (1978)29 Cong. Rec. 1955 (1897)Act of August 30, 1990, 26 Stat. 39126 Stat. 391 (emphasis added).

Recognizing that some entrymen and settlers were in possession of lands that exceeded 160 acres and that more land often was required to support a family, especially in the West, Congress set limits on future entries of 320 acres in the aggregate; however, it also confirmed the entries and validated the rights of prior entrymen and settlers in the lands they already possessed:

No person who shall after the passage of this act, enter upon any of the public lands with a view to occupation, entry or settlement under any of the land laws shall be permitted to acquire title to more than three hundred and twenty acres in the aggregate, under all of said laws, but this limitation shall not operate to curtail the right of any person who has heretofore made entry or settlement on the public lands, or whose occupation, entry or settlement is validated by this act . . . .

Id. (emphasis added).

If these preemption laws and homestead acts all limited to 160 acres the amount of acreage subject to preemption or homesteading, the question then arises as to the need for the "savings" clause Congress incorporated into the 1890 Act. The clause had the effect of validating entry, settlement or occupation of more than 320 acres prior to 1890. Apparently in drafting and adjusting such a provision, Congress recognized that many settlers in the West had taken possession of larger tracts of land, especially under the split-estate provisions of the Mining Acts of 1866 and 1872. Such settlers who had entered upon the public domain before 1890 and proceeded to sever such acreage from the public lands of the United States by utilizing the water, forage, timber, and other vegetation, and otherwise taking possession of the surface estate, had his or her right validated and confirmed, See Tameling 26 Stat. 391.

The Creative Act of 1891 confirmed some of these same concepts and made further modifications to the land laws. First, Section 4 of the Act repealed the preemption laws. Second, Section 17 of the Act clarified the acreage limitation of the Act of August 30, 1890, such that it applied only to entries onto agricultural lands, and not to those onto mineral lands. Finally, section 24 of the act gave authority to the President to set aside and to reserve forest reserves as public reservations. The Forest Service Organic Act of 1897, 30 Stat. 11, authorized the surveying of lands actually occupied by settlers, and also set limits on the purposes for which the Secretary of the Interior [now Secretary of Agriculture] could establish a National Forest. The Act provided:

No public forest reservation shall be established, except to improve and protect the forest within the reservation, or for the purpose of securing favorable conditions of water flows, and to furnish a continuing supply of timber for the use and necessities of the citizens of the United States; but it is not the purpose or intent of these provisions, or of the Act providing for such reservations, to authorize the inclusion therein of lands more valuable for the minerals therein, or for agricultural purposes, than for forest purposes.

United States v. New Mexico, 438 U.S. 696, 718,

98 S.Ct. 3012, 57 L.Ed.2d 1052 (1978)30 Stat. 36.

As further evidence that the United States recognized the productivity of the development of water sites, Congress passed the Reservoir Siting Act of January 13, 1897, (SRSA) 54th Cong. Sess. II, Ch. 11. The act allowed a person or livestock company to construct reservoirs on unoccupied public lands for the purpose of watering livestock, and gave control of the reservoir to the person or company along with the right to 160 acres of land surrounding the reservoir. The only caveat was that the reservoir could not be fenced and had to be kept open for the free use of any person desiring to water animals of any kind. Id. The important distinction to be highlighted here is that the reservoir developer was required to share the water, but had complete control of the land for grazing and other purposes. Thus a settler could develop reservoirs under this Act and have them surveyed on his plat maps filed with the land office, effectively claiming the entire surface of the 160 acres surrounding each reservoir. There was apparently no limit to the number of reservoirs which could be sited under this act and a settler with large grazing holdings could effectively control thousands of acres by developing reservoir sites throughout his range. See id.

If any doubt existed concerning the intent of Congress to create split estate rights for livestock owners, the Stockraising Homestead Act of 1916 (SRHA) put all such doubts to rest. 39 Stat. 862, December 29, 1916. First the Secretary of Interior was to designate lands suitable as stockraising lands where the surface of such lands were chiefly suitable for grazing and raising forage crops. The SRHA allowed any person otherwise eligible to make entry under the homestead laws for purposes of establishing a stockraising homestead. The Act placed an acreage limitation of 640 acres per entry. The entrymen were required to make permanent improvements to the land in the value of $1.25 per acre no later than three years from the entry. Finally, the act provided that all entries and patents concerning the SRHA were

to be made with the mineral rights reserved to the United States. Taylor Grazing Act, 48 Stat. 1269, 43 U.S.C. § 315bGranger-Thye Act of 1950, 64 Stat. 88., 16 U.S.C. § 580lFederal Land Policy and Management Act 0f 1976 (FLPMA),

90 Stat. 2786, 42 U.S.C. § 1701 Bacon v. Walker, 204 U.S. 311,

27 S.Ct. 289, 51 L.Ed. 499 (1907) Omaechevarria v. Idaho, 246 U.S. 343,

38 S.Ct. 323, 62 L.Ed. 763 (1918) In re Calvo, 253 P. 671 (Nev. 1927) McKelvey v. United States, 260 U.S. 353,

43 S.Ct. 132, 67 L.Ed. 301 (1922); Central Pacific Railway Company v. Alameda County California, 284 U.S. 463, 52 S.Ct. 225, 76 L.Ed. 402 (1932).

The United States has asserted that the states never had any power to grant property interests in Federal lands. When viewed in the narrow context of a fee simple grant, this technically may be true. However, it is clear, in connection with the discussion of the applicable United States statutes, that the United States has recognized and confirmed private property rights acquired pursuant to state and local law, custom, and practice. The fact that the United States recognized the grazing rights of stockmen in the west after the passage of the Taylor Grazing Act is vividly demonstrated in a publication by the Agricultural Extension Service of the University of Nevada, entitled The Taylor Grazing Act in Nevada which reflects the statements and promises given to the stockmen of Nevada by F.R. Carpenter, Director of Grazing for the U.S. Grazing Service, then part of the Department of Interior,^[1]at a meeting in Reno, Nevada on January 24, 1935. At this meeting, excerpts of various statements delivered by Mr. Carpenter are quoted as follows:

In Nevada water controls the range. The amount of land which water will serve is the commensurability; that includes the amount of carrying capacity of the land and available water, determined by local usage, and this will be the basis for granting grazing permits under the Act. (Exhibit 1C, page 68)

To analyze his setup from a legal setup [sic], [Senator Cowles] has made some water developments that control range rights on the range. State laws recognize his rights so he has rights so long as the state laws hold. If the Federal laws supersede State law, he might lose his water. I have heard no one raise the question of the constitutionality of the Taylor Act. The Supreme Court said until they wished to, the states could regulate by policing regulations. So there is due process of law when the Taylor Act came, and there is a possibility that the Act might have hashed up his range rights to make his water rights. He is guaranteed by Federal law that he has heretofore been guaranteed by the State law. You have the word of the Congress and they are attempting to follow local use and customs which presupposes range rights, giving them much better rights than they had before. ( page 75)

The Taylor Act does not take into consideration non-use of your rights other than that the Taylor Act will go with your commensurability and can never be lost to you. A grazing right granted under the Act is part of the lands. It is mortgageable, saleable with your land, and can never be extinguished. ( page 76)

I want to make this point clear. Hereafter and under the Taylor Grazing Act the grazing privileges do not sell with the livestock. They have to stay with the land. They have to be sold with the land or water. ( page 76)

[Custom] is the best evidence of local usage. Your state laws are just a modification of your local usage. ( page 78)

So, when you loan money on livestock, you know what you are doing. You don't get any range rights with them. When you loan your money on a piece of property which has so much commensurability and rights on the range, then you are loaning your money on a setup which has interwoven with it something that can never be taken away from it. It is part of the land. For that reason, it seems to me and I have it from those in authority, it is a satisfactory construction from the standpoint of the money/lender to know that the range rights go with the real property and water; it gives a stabilization and adds to the total value of the operating ranch unit. If it does that they can't be taken away through non-use. (page 78)

There is a difference between a permit and a grazing right. I didn't say a permit would never be changed. I said the rights would remain. The permits go up and down. ( page 79)

(Thomas E. Buckman, The Taylor Grazing Act in Nevada, Agric. Ext. Svc. Bull. 76 (Univ. of Nev., Reno) Feb. 15, 1935.)

As is evidenced from the foregoing, Mr. Carpenter, then Director of Grazing for the Department of the Interior, consistently referred to grazing rights and affirmatively stated that such rights granted under the Act are part of the land and as such are mortgageable, saleable with the land, and interminable. In 1935, the range rights of the stockmen were well recognized by the United States.

II. The United States Has Attempted to Regulate Water Rights Through Various Authorities, Including Subsequent Acts of Congress and Regulatory Authority.

In water rights adjudications throughout the west, the United States is claiming that it owns much of the water resources in the western states. In adjudications in Idaho, Nevada, and New Mexico, the United States has taken the position that the federal government, as the landowner, owns the water rights anywhere they exist on federally administered lands. In most of these case, the United States has never put the water to beneficial use; yet claims that it has rights that derive from the use of the water by settlers who have entered upon these lands under the homestead laws or the Mining Act. Various theories have been espoused for the United States' claims, but they all seem to derive from the principle that once the federal government gained ownership rights to the so-called public lands, the United States obtained the rights to the resources on that land, especially the water rights. Thus, a permittee who is using federally administered land, is characterized as an agent of the federal government for purposes of placing the water rights to beneficial use. Cattle have been described in some cases as the instrument of the federal government's actions to appropriate water rights and put them to beneficial use as agents of the government, even though the United States does not own the cattle.

In varying litigation contexts, the United States continues to assert its position that only the government, not individuals, may own water rights on federal lands. The United States' position has taken two forms. First, the United States has argued that even if the courts rule that private parties can own water rights on federal land, transfers of the water rights as appurtenances should not be recognized. Second, the United States claimed its own beneficial use water rights based not on the acts of the United States, but rather based on private ranchers' beneficial use of those same waters. In a case in Nevada, the United States has argued that private parties cannot own water rights on federal land. In two separate cases involving federal reclamation projects, the United States has alleged that it continues to possess a legal title interest in reserved water rights that have been sold to private parties. The common theme through all of these cases is that the United States is loathe to recognize the private water rights of individuals on federal land despite legislative, judicial and historical support for these private water rights. Instead, through litigation, the United States attempts to claim exclusive federal ownership and control of these waters.

Many claimants in the Snake River Basin Adjudication ("SRBA") are ranchers seeking to protect water rights initiated in the late nineteenth century by their predecessors in interest. In many instances what is at stake are water rights literally passed and transferred from generation to generation to today's ranchers. It is well settled in western states recognizing the doctrine of prior appropriation that appropriative water rights are appurtenant to the land in connection with which the use of water is made. This is so even if the place of use of the water right and the land to which it is claimed to be appurtenant are different, in which case the relevant inquiry is whether the use of the water right is connected with the use, enjoyment, and economic viability of the base property. In the context of cattle operations, stockwater rights can be appurtenant to the base ranch property and transferred as such. See, e.g., Kinney on Irrigation and Water Rights, Volume 2, sections 997, 1000, 1005 (a water right necessary to the beneficial enjoyment of the land becomes appurtenant to such land); Kinney on Irrigation and Water Rights Volume 2, section 1009 (where there is the expression "together with all and the singular the appurtenances thereunto belonging and appertaining," or one of similar purport, using the word "appurtenances, " unless there is a specific reservation of the water right, the water right will pass with the transfer of the land the same as though it had been specifically mentioned in the deed). Despite the clear state of the law in this area, the United States has asserted its position, first, that stockwater rights are not appurtenant to base ranch properties and, second, that unless stockwater rights are specifically mentioned in the deeds they are not transferred as appurtenances.^[2] Following literally years of litigation of this contentious issue, the SRBA Court within the past month issued an opinion rejecting the United States' position. In this ruling, the SRBA Court held that water rights on federal land could be, and were in fact, transferred as appurtenances to the base ranch property with the earliest supportable priority date. See, In Re SRBA Case No. 39576, Special Master's Report and Recommendation, Findings of Fact and Conclusions of Law for Water Rights 55-10288B et al. (February 27, 2003).

Further undermining recognition of private stockwater rights on federal land, the United States has claimed private rancher's stockwater rights as the United States' own. At the initiation of the general adjudication in the SRBA, the United States filed claims to all stockwater sources, large or small, on federal land. The purported basis of many of these water right claims was beneficial use. Specifically, the United States claimed a beneficial use stockwater right on federal land even though the United States does not now, and did not ever, water livestock. Rather, the United States filed claims to water rights initiated and perfected by private ranchers.^[3] United States' opposition to private water rights on federal land is being posited in many wester venues. This position is being asserted by the United States in a number of different contexts. In an action involving takings claims pending before the United States Court of Federal Claims, the United States opposed Plaintiffs asserted water rights located within a federal grazing allotment. See Hage v. United States, 51 Fed. Cl. 570 (2002). Over the United States' objection, the Court held that the Plaintiffs in that case presented evidence that Plaintiffs and their predecessors appropriated and maintained a vested water right on federal grazing allotments and that the government cannot deny Plaintiffs access to their vested water rights without providing a way for them to divert that water to another beneficial purpose.

III. The United States Asserts Its Regulatory Authority To Curtail Water Rights.

The United States federal agencies have asserted in the past that under the regulatory authority vested in them by the U.S. Congress, they have the power to control water rights in the west. In some cases, the federal agencies have gone so far as to claim in water rights adjudications that they must control the water rights in order to ensure that other natural resources on the federally administered lands are protected from harm. The classic case of this is the Endangered Species Act. In significant cases throughout the west, the United States has taken the position that privately owned water rights on the federally administered lands are subject to curtailment or even termination if an endangered species is present and the use of the water has the potential to cause harm to the protected species. The result is that many water rights have been affected by such determinations, even if the species does not actually exist at the site but only contains suitable habitat.

Other common uses of regulatory authorities by the federal agencies are the Taylor Grazing Act, the Granger Thye Act, the Forest Service Organic Act and the Clean Water Act, among others. The United States continues to use these statutes as the basis for its regulatory authority to curtail water rights long ago established on federally administered lands.

In addition to the above, in pending litigation in Nevada involving the Newlands Reclamation Project, the United States' position from the outset of the litigation was that the United States has an ownership interest in Project water rights under the Reclamation Act of 1902. See, United States v. Board of Directors, Truckee-Carson Irrigation District et al., Case No, CV-N-95-757-HDM in the United States District Court for the District of Nevada, Complaint (wherein the United States alleges that the Project water rights are "owned by the United States"). Similarly, in on-going litigation involving the Rio Grande Project in New Mexico, the United States takes the position that it "has legal title to (reclamation) Project water rights." See, State of New Mexico v. Elephant Butte Irrigation District, Case No. CV-96-888 in the State of New Mexico, County of Dona Ana, Third District Court.^[4] In sum, the United States continues to claim an ownership right to all waters in federal reclamation projects as well as the right to control the use of that water, despite the clear ruling in Nevada v. United States that individual water users, not the United States, own the water rights. In Nevada v. United States, the United States Supreme Court wrote and held the following:

We can say here what was said in Ickes v. Fox, "Although the government diverted, stored and distributed the water, the contention of petitioner that thereby ownership of the water or water-rights became vested in the United States is not well founded. Appropriation was made not for the use of the government, but, under the Reclamation Act, for the use of the land owners; and by the terms of the law and of the contract already referred to, the water rights became the property of the land owners, wholly distinct from the property right of the government in the irrigation works . . . . In light of these cases, we conclude that the government is completely mistaken if it believes that the water rights confirmed to it by the Orr Ditch decree in 1944 for use in irrigating lands within the Newlands Reclamation Project were like so many bushels of wheat, to be bartered, sold, or shifted about as the Government might see fit. Once these lands were acquired by settlers in the Project, the Governments "ownership" of the water rights was at most nominal; the beneficial interest in the rights confirmed to the Government resided in the owners of the land within the Project to which these water rights became appurtenant upon the application of Project water to the land.

Nevada v. United States, 463 U.S. 110, 125-126 (1983) (internal citations omitted). Instead of recognizing the private water rights within the Reclamation Projects, the United States currently asserts a continued legal title interest in the water rights coupled with a right to limit the amount and control the use of water which it previously sold to private parties, thus impermissibly restricting water rights that were conveyed from the United States to private interests.

IV. Conclusion

The United States continues to regulate and to curtail water rights on federally administered lands and continues to assert positions in water rights adjudications that private citizens do not have the right to claim water rights on federal lands absent an express grant of such rights by the United States. These positions are at odds with over 140 years of legal precedent and are forcing private citizens to litigate over their water rights when the United States has long ago recognized such rights and the Congress has preserved them from being interfered with through savings clauses in significant Congressional acts, including the Federal Land Policy and Management Act.

^[1]Later, the Grazing Service was combined with the General Land Office to form the Bureau of Land Management (BLM) of the Department of Interior.

^[2] The water rights at issue, and their pre-Taylor Grazing Act priority dates, are usually supported by evidence of government patents for the ranching operations, which used nearby government land for grazing and watering, and are further supported by evidence of prior grazing and watering of livestock on federal land prior to the date of the enactment of the Taylor Grazing Act.

^[3] Idaho law requires actual beneficial use of water to support a water law claim based on the doctrine of prior appropriation. See, In Re SRBA Case No. 39576, Minidoka National Wildlife Refuge v. United States, 996 P.2d 806, 811 (2000).

^[4] In the United States' Supplemental Brief to Motion for Amended Complaint, the United States states that "the United States has a water right defined as legal title to water stored, diverted and used in a federal reclamation project." See United States' Brief at p. 18.